Legacy of "Kyivmiskbud": how the Kushnir business fights forlLand with the state

LLC "Kyivinvest", owned by Illya Kushnir, the son of ex-head of "Kyivmisbud" Ihor Kushnir (pictured right and left in the collage), is attempting through legal action to regain the buildings of the former balneological hospital on Hetman Pavlo Polubotko Street, 34. The company acquired ownership of this property on rather questionable grounds, and last year this asset was expropriated by the DIU of the Ministry of Defence for state needs. The State Bureau of Investigation, as part of a criminal investigation, has already found that structures of the Federation of Trade Unions of Ukraine (FPU), which previously owned the hospital, sold it to "Kyivinvest" at a reduced price of 74.3 million, although its real value was 138.3 million hryvnias. In connection with this, one of the federation’s officials may soon face trial for embezzlement of state property. It is also notable that the Kyiv City Council, granting the specified LLC a lease on a land plot of more than 1.5 hectares under this medical facility in 2024, likely violated the law. After all, de jure, this land could only be used "for health purposes," but the city authorities allowed the reconstruction of the buildings located there, including for "commerce."

According to information available to KV, LLC "Kyivinvest" is currently in a legal battle with one of the military units and the DIU of the Ministry of Defence of Ukraine over the buildings of the former balneological hospital on Hetman Pavlo Polubotko Street, 34 (formerly known as Popudrenko Street, Socmisto residential area, Dniprovskyi district).

This real estate was forcibly expropriated last year by the Ministry of Defence for state needs. Meanwhile, its former owner, the aforementioned LLC "Kyivinvest," purchased these buildings on dubious grounds from FPU structures back in 2019, and in 2024 the company received land under them from the Kyiv City Council for the reconstruction of this property into something "grand" - into a "complex of multifunctional public and health-oriented buildings." Thus, this LLC essentially defends its right to develop the plot with commercial buildings.

Criminal privatization

In 2018, the FPU and its subordinate PJSC "Ukrprofhealth" deemed further use of the resort balneological hospital on Popudrenko Street, 34 in Kyiv to be inappropriate and decided to dispose of it through a competition. This medical facility, where people were once treated with mineral waters, etc., was no longer operational by that time. In March 2019, the chairman of the board of "Ukrprofhealth" (also deputy head of the FPU) approved the initial sale price of the hospital buildings at 70.8 million hryvnias. On April 18 of the same year, a specially created commission at "Ukrprofhealth" decided to recognize LLC "Kyivinvest" as the winner of the privatization competition, as the latter, according to the commission, met the fixed competition conditions and offered the highest price of 74.3 million hryvnias, including VAT.

Balneological hospital on Popudrenko Street in the 80s (photo from social media)

On August 27, 2019, a purchase agreement for the resort balneological hospital on Popudrenko Street, 34 was concluded between PJSC "Ukrprofhealth" and LLC "Kyivinvest" for 74.3 million hryvnias, which the buyer company paid even before signing the mentioned agreement. The funds obtained from the sale of these buildings were subsequently used by the officials of the aforementioned PJSC in the enterprise’s business activities.

Shortly before that, on August 20 of the same year, the State Bureau of Investigation began investigating possible violations during this privatization as part of criminal proceedings №62019100000001170. During this investigation, law enforcement officers initially found that the actual value of the resort balneological hospital, which included the building of the medical facility with an area of 11,600 sq.m. and a garage building with an area of 356.9 sq.m., according to the conclusions of a forensic valuation and construction expert examination, was 138.3 million hryvnias. Consequently, during its sale, the defendants in this case allegedly caused damage to the state.

Law enforcement authorities consider the aforementioned deputy head of the FPU - chairman of the supervisory board of "Ukrprofhealth," as well as a number of other individuals unidentified by the investigation, guilty of this. They allegedly "exerted influence (threats, bribery, persuasion) on individual members of the supervisory board and general meetings of shareholders of PJSC "Ukrprofhealth," as well as members of the FPU presidium, to persuade them to make illegal decisions regarding the disposal of the resort balneological hospital building." Meanwhile, the SBI established that the alleged perpetrators did not have legal authority to make decisions regarding the privatization of state property, and the subsequent selection of the buying company was made "allegedly through a competition procedure," in order to avoid criminal liability in the future.

The SBI also established that these events were preceded by the fact that authorized persons of "Ukrprofhealth" first described the dilapidated technical condition of the balneological hospital and its unprofitability based on the results of business activities, after which the experts under their control undervalued the buildings in their valuation reports.

It should be noted that, according to Ukrainian media, the aforementioned deputy head of the FPU is Volodymyr Sayenko, who held this position since 2013. Moreover, in April 2023, he received another suspicion due to an attempt to bribe a judge in the case with $150,000 so that the judge would change his preventive measure, possibly holding under custody, with the alternative of bail set at 124 million hryvnias.

In November 2023, the SBI transferred the case regarding Sayenko to the court for consideration on the merits - he is officially charged with embezzlement of others’ property by abuse of power by a public official, committed by prior conspiracy of a group of persons, in particularly large amounts (part 5 of Article 191 of the Criminal Code of Ukraine). Moreover, in the framework of this case, the illegal disposition of more than four hundred assets is being investigated, which have already been transferred to the ARMA - the National Agency for the Identification, Tracing, and Management of Assets Derived from Corruption and Other Crimes.

Suspicious land allocation and scandalous expropriation

On March 25, 2024, the Kyiv City Council registered a draft decision regarding the lease of a plot of land on Hetman Pavlo Polubotko Street, 34, with an area of 1.53 hectares, to LLC "Kyivinvest" for a period of 5 years (cadastral number - 8000000000:66:199:0002). The subjects of submission for this document were the now-dismissed deputy head of the Kyiv City State Administration (KCSA) for the exercise of self-government powers, Petro Olenych, and the Department of Land Resources of the KCSA.

According to the document, this land was supposed to be allocated "for the reconstruction of existing real estate into a complex of multifunctional public and health-oriented buildings." Under "real estate," the above-mentioned buildings of the balneological hospital and garages owned by "Kyivinvest" at that time were implied. The explanatory note to the draft decision clarified that, according to the General Plan of Kyiv, functionally, this plot was partially related to the territory of public buildings and structures and partially to the territory of streets and roads.

Plot on Hetman Pavlo Polubotko Street on the map

Meanwhile, already on April 3 of the same year, the Kyiv City Council committee on urban planning, architecture, and land relations made changes to this draft decision, agreeing to extend the lease term to 15 years. Further, on April 25, 2024, this document was returned without the approval of the legal support department of the Kyiv City Council. One of the reasons was that at that time the plot had a designated purpose "for other health purposes," and the city council intended to change it without providing justification that the "new" designated purpose would correspond to its functional purpose and established requirements of land legislation. Thus, it was a violation of the land design change procedure.

On May 30, 2024, the Kyiv City Council decided №628/8594 without discussion to approve this land allocation for 15 years - 74 deputies voted for it. The city council traditionally rejected the conclusion of the legal support department.

Shortly before this, on May 27 last year, one of the military units signed an act on the forced expropriation of the balneological hospital for the sake of the state. And on May 30, 2024, the day the Kyiv City Council adopted the decision to lease the plot on Hetman Pavlo Polubotko Street to LLC "Kyivinvest," the Registration Department of the KCSA registered ownership of the specified real estate (the hospital and garages) in favor of the DIU of the Ministry of Defence of Ukraine. Approximately last November, "Kyivinvest" applied to the Kyiv Commercial Court with a lawsuit seeking to invalidate the aforementioned act on the forced expropriation of property, cancel the decision on registration of ownership by the DIU, reclaim the buildings from the control of this administration, etc.

Currently, the State Register of Court Decisions lacks information on how exactly LLC "Kyivinvest" justifies its claims - that is, why the company believes these buildings should be returned to it. Furthermore, this case is currently being considered in a "confidential mode." This means that all decisions regarding it, made by the commercial court after the New Year, are currently classified.

Whose interests?

According to the analytical system Youcontrol, the Kyiv-based LLC "Kyivinvest" was registered in November 2006. Its director is listed as Nadiya Zasenko, and its founder is JSC "ZNVKIF ’Orlando’." The ultimate beneficiary is Illya Kushnir, a resident of Kyiv. He has been the owner since January 2023, and prior to him, the ultimate beneficiaries were Kyiv residents Hrach Antonyan and David Rostomyan. However, Illya Kushnir has been the owner of the largest block of shares in the same JSC "ZNVKIF ’Orlando’" since 2018.

Illya Kushnir is the son of Ihor Kushnir, the long-term head of PJSC "Holding Company (HC) ’Kyivmiskbud’" Ihor Kushnir (who served as president and chairman of the board of this company from April 2012 to December 2023). The latter formally left the position at his own request, but in fact, it was preceded by a series of scandals regarding the activities of this "municipal developer" and possible corruption by Ihor Kushnir himself. At the same time, these loud stories did not leave his family unaffected. For example, Illya Kushnir, who was a deputy in the Kyiv City Council of the current IX convocation (elected from the party of Kyiv Mayor Vitaliy Klychko "UDAR"), resigned as a people’s representative soon after his father’s dismissal - in March 2024.

On May 13, 2023, Bihus.Info published "Presidential Suite", revealing that "Kyivmisbud" paid billions of hryvnias to firms associated with the then-head of the company - over 3 billion hryvnias in total during 2020-2021. Among such firms, journalists mentioned "Jaguar." Additionally, "Bihus.Info" discovered that relatives and close associates of Ihor Kushnir developed luxurious cottages on land in Kozyn, which Kyiv City Council handed over to "Kyivmisbud" in the early 2000s. The plot, almost 2 hectares in size, was allocated for private use in 2013 to a company called "Lisorgbud," one of whose founders was Oksana Kushnir’s aunt.

In July 2023, journalists from the same media outlet found that the company of Ihor Kushnir’s wife in 2019-2020 acquired a French firm, under which a luxurious villa on the French Riviera with an estimated cost of 20 million euros is registered. "Bihus.Info" also reported that in May of the same year, Kushnir and his wife conquered the peak of Mount Everest, leaving the country due to health reasons - having a third group of disability.

All these stories came to light when PJSC "HC ’Kyivmiskbud’" entered a crisis stage: in 2020, the company started to finish almost two dozen "Ukrbud" complexes but was unable to meet all its obligations. As a result, the construction and commissioning of buildings in several residential complexes (RC) were delayed, which "Kyivmisbud" explained due to a deficit of financial resources, among other reasons. In connection with this, the developer repeatedly requested funds from the government and the city authorities to complete "Ukrbud" complexes (sums mentioned ranged from 1 billion to 2.2 billion hryvnias).

The Kushnir family is directly or indirectly related to several high-profile developments in the capital. For instance, in 2019, the National Police launched an investigation into possible legal violations during the construction of the "InWood" cottage town (CT) in a recreational area on Lisovo-Kozyanska Street in Koncha-Zaspa (Holosiivskyi district of Kyiv). The developer of this project is LLC "Agro-Terminal" (co-owner - Illya Kushnir), and the developer is the "BudCapital" company, associated with Kushnir senior and his business partner Vadym Stolar (current IX convocation Verkhovna Rada MP, elected from the now-banned "OPFL" party). Law enforcement found that the project was carried out under the guise of reconstructing a rest base, which was likely built illegally in the 1990s. Also, it was determined that the land plot under the elite housing was not designated for such construction.

PJSC "Ukrprofhealth" was registered in 1999, but the joint-stock company has its origins in the 1960s when the Ukrainian Republican Council of Trade Unions established an eponymous partnership. This PJSC is responsible for the maintenance of FPU’s medical and health facilities - a number of sanatoriums and resorts. The head of the board of "Ukrprofhealth" is Mykola Subota, with the largest shareholders being the FPU (92.9%) and the Social Insurance Fund (7.1%). In turn, the FPU has been headed by Hryhoriy Osoviy since 2014. The DIU of the Ministry of Defence has been led by Lieutenant-General Kyrylo Budanov since August 2020, and the Ministry of Defence of Ukraine has been headed by Rustem Umerov since September 6, 2023.

The Department of Land Resources of the KCSA has been headed by Valentyna Pelykh since June 29, 2021 (acting as the head of this structure since April 2, 2021). From July 27, 2018, to April 1, 2021, this department was headed by the aforementioned Petro Olenich. From April 2021 to March 2025, he oversaw the work of this structural unit of the city administration as the deputy head of the KCSA. Olenich was dismissed from the city administration due to suspicion of land manipulations, which he was informed about by the National Anti-corruption Bureau (NABU) in February 2025 as part of a high-profile criminal case known as "Operation ’Clean City’". Currently, the area of land relations in the capital is overseen by Deputy Head of the KCSA Vladyslav Andronov.

Author: Ivan Kulyk